Correlation Between Gain Therapeutics and Allarity Therapeutics

Can any of the company-specific risk be diversified away by investing in both Gain Therapeutics and Allarity Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gain Therapeutics and Allarity Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gain Therapeutics and Allarity Therapeutics, you can compare the effects of market volatilities on Gain Therapeutics and Allarity Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gain Therapeutics with a short position of Allarity Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gain Therapeutics and Allarity Therapeutics.

Diversification Opportunities for Gain Therapeutics and Allarity Therapeutics

-0.03

Correlation Coefficient

Gain Therapeutics  Allarity Therapeutics

Good diversification

The 3 months correlation between Gain and Allarity is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gain Therapeutics and Allarity Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allarity Therapeutics and Gain Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gain Therapeutics are associated (or correlated) with Allarity Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allarity Therapeutics has no effect on the direction of Gain Therapeutics i.e., Gain Therapeutics and Allarity Therapeutics go up and down completely randomly.

Pair Corralation between Gain Therapeutics and Allarity Therapeutics

Given the investment horizon of 90 days Gain Therapeutics is expected to generate 2.85 times less return on investment than Allarity Therapeutics. But when comparing it to its historical volatility, Gain Therapeutics is 1.44 times less risky than Allarity Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Allarity Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  112.00  in Allarity Therapeutics on December 29, 2024 and sell it today you would lose (8.00) from holding Allarity Therapeutics or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gain Therapeutics  vs.  Allarity Therapeutics

Gain Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gain Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Gain Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Allarity Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allarity Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating essential indicators, Allarity Therapeutics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gain Therapeutics and Allarity Therapeutics

The main advantage of trading using opposite Gain Therapeutics and Allarity Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gain Therapeutics position performs unexpectedly, Allarity Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Allarity Therapeutics will offset losses from the drop in Allarity Therapeutics' long position.

The idea behind Gain Therapeutics and Allarity Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.